Lower benefits won’t prevent rebound in spending

The government has said it will delay the Budget Update until July so it can reassess the eligibility of the JobKeeper scheme. Reducing the payments for part-time workers could save the government around $2bn per month, but the impact on household incomes should be small. A bigger threat to household incomes would be the removal of the $550 a fortnight JobSeeker supplement. The key point though is that the rebound in spending as the economy reopens is likely to overwhelm these changes so we reiterate our forecast that consumption will rebound by 10% q/q in Q3.